Your morning flat white just got pricier

Saturday, 28 June 2025

When the price of raw coffee beans went up by more than 77%, a cafe long known for its affordable flat whites had no choice but to follow suit.

“For us, we made the call this year that now’s the time, because we didn’t see the price trailing off again,” said Raglan Roast manager Jed Wright.

Raglan Roast increased its cup prices increasing by 50c to $1, and retail beans increasing by an average of 21%. A takeaway flat white now costs $5.50.

But customers had been supportive, he said.

“When you’ve got your customers telling you to put your prices up, you kind of need to put your prices up.”

A poor harvest in Brazil and coffee tree rust affecting the yield was one of the reasons behind the rise in the price of so-called “green” beans, Wright said.

“Coffee, like bananas, is pretty much a monoculture. Any little thing that gets a foothold seems to do very well.”

And as well as the cost in the raw material, cafes were also contending with a rise in wage, labour, and production costs.

The rise in costs had meant Raglan Roast had to ditch a long-standing loyalty system called “The Book,” where customers got an extra drink after paying $20 upfront towards a suite of coffees of their choice.

This had averaged at about $3.33 per flat white, but as the cost of green beans rose, it became impossible to continue to offer the deal.

Now the cafe was offering a buy nine, get two free deal, with the buyer asked to commit up front, averaging at $3.75 a coffee, he said.

He said the response from the customers had been “awesome”.

Raglan Roast head of operations Alanah Bruce said supply constraints and adverse weather conditions were affecting all types of coffee - from lower grade to speciality.

In addition to this, there was a rising global consumption, with more people in countries such as China and the United Arab Emirates starting to drink coffee.

“People that usually were tea drinkers have started seeing the hype around coffee.”

“It’s a really interesting time in uncharted territory for coffee.”

She said Raglan had always tried to position itself in a way that made coffee affordable and accessible.

“If our prices, our costs go up by 100% just on the actual raw product, it really significantly affects the bottom line.

“We know it's not effective to pass that completely on to a customer, because they're not going to be able to come back and afford to spend more time and more money with us.”

Bruce said coffee was more than the actual product itself: it was also about ritual, routine, community and connection.

But getting people to pay top dollar for coffee, in the way they do for a beer or wine was difficult.

“It's a big shift for New Zealanders, I think, to have to start considering that cost and understanding how much goes into a cup of coffee.”

Sketchbook co-owner Logan Collinge said the rise in bean prices starting in November last year had caught everyone off guard.

Coffee had been a notoriously undervalued product for a while now, never getting out of its commodity grade, he said.

“It is still at the whims of traders and the like.”

Much of the beans being drunk now had been purchased when prices were high in November, so those costs were only just hitting the market now, he said.

The team at Sketchbook had been aware the cost of coffee was increasing, so had priced themselves accordingly, he said.

While the cafe’s prices were probably one of the higher ones in Wellington, Collinge said they had wanted their coffee to be a well-crafted luxury.

“Yes, the price of coffee has gone up, but I think coffee is more than just what's in the cup. I think part of what plays into pricing is the overall experience and just and things like that.”

Bond Street Deli offers filter coffee for $3.50 a cup. Owner Ian Kerry said he believed the worldwide issue had been caused by a poor harvest.

While he could increase his coffee’s price to $3.75, he didn’t think it was necessary, he said.

“If it was going to be an increase, it would have to be a large increase. And I don't want to do that.”